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of the Federal estate tax, Dr. DeAngelis caused VRD/RTD to join
the STEP plan on December 30, 1993. Drs. DeAngelis and Domingo
were told that their 1993 and 1994 payments to the STEP plan
would suffice to fund the future costs of providing life
insurance benefits for the remainder of their lives and to
provide future distributions of cash to them at the time of their
choosing. From the beginning of their decision to participate in
the STEP plan, the participating doctors were most concerned
about the amounts of, and their ability to receive, their
expected benefits from STEP. In fact, Drs. DeAngelis and Domingo
requested calculations and illustrations showing how much they
would receive depending upon the number of years that
contributions were made to the STEP plan. Drs. DeAngelis and
Domingo also wrote to Mr. Katz for assurance that they would
receive their benefits and requested a written opinion from the
plan sponsor about how to characterize their planned departures
from their practices so as to meet the terms of the STEP plan as
written. STEP advised the participating doctors on what to say
in order to get their promised benefits, and STEP assured the
doctors that a protocol was in place to ensure that they would
get their money as intended. Because each of the participating
doctors’ PCs funded its own employee’s benefits under the STEP
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Last modified: March 27, 2008